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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
[Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes
1. Problems with government schemes 2. 12th FYP: food processing 3. Ministry of Food Processing Industries (MoFPI) 1. Vision 2015 Food processing 2. National Mission on Food Processing (NMFP) 3. #1: Mega Food Parks: 1. Hub and Spoke Model 2. Location Factors: Bhagalpur and Chittor 3. Benefits of Each Mega Food park 4. #2: Cold Chain infra 5. #3: Abattoir modernization 6. MoFPI: Misc. Schemes 4. National Policy on Handling and Storage of Foodgrains 5. PEG scheme 6. FCI reforms 7. Gramin Bhandaran Yojana 8. National Horticulture Mission (NHM) 1. Terminal market complexes (TMC) 2. National Horticulture Board (NHB) 9. National Centre for Cold Chain Development (NCCD) 10. Scheme for Agri Market 11. Agmarknet 12. Dairy Schemes 1. National Dairy Plan (NDP) 13. Agro Export zones (AEZ) 1. AEZ: Problems 2. Export credit schemes 14. Misc. Bodies 1. Export related 2. Boards 3. Research/Education related In the previous article, we saw the basic details related to food processing industry. Click me if you didnt. Time to dive into government schemes, policies, plans.
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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
1. Agriculture is a State subject. No scheme can be successful without coherence between the Centre and States in policies and strategies. But we have plethora of bodies and departments @center and state level=empires within empires. Even Left hand doesnt know what right hand is doing. Problem is compounded when ruling parties are different at state and center level. 2. Most schemes have Low ceiling (they just give a few lakh rupees) + as plant size increases, the MSME tax benefits decrease. So, foodentrepreneur setups two small plants using money two schemes, rather than one big plant. Smaller the plant=>poor economies of scale=>high production cost, cant invest in marketing-research, innovation, export quality products. 3. These Subsidies/grants are back-ended (meaning ca$H is not given before you start the project, but only after the project is completed or in final stage) 4. But Parameters of project approval/ file-Processing= non-transparent (just like our UPSC). Timely clearance of project files=nope. Sometimes they dont even give reasons for rejecting project. Food-Entrepreneur is unsure whether bureaucrats will approve his file or not (+bribe demand) 5. Significant time lags from the date of application for financial assistance, to release of funds= affects the project schedule= cost overruns for the investor. 6. Most schemes seek to get investors to pump money in certain infrastructure without providing the necessary support for the utilization of the infrastructure. (e.g. asking pvt player to setup cold storage, without guaranteeing continuous electricity supply). 7. Overenthusiasm =Excess capacity. Example: many tax-benefits given to groundnut oil refining industry=new units keep popping up even when groundnut cultivation is not sufficient to provide raw material to all refineries. Result: No unit runs on full capacity, industrial sickness, loan defaults, NPA. 8. Inputs of Panchayati raj institution, cottage industries, local entrepreneurs are considered irrelevant in scheme design. 9. Lack of focus/financing for freezer cabinets in retail outlets/kirana stores, vending machines for tea/coffee/beverages. 10. Working capital requirements are high for food processing industry (thanks so many intermediaries, electricity, high duties on imported chemicals etc.) But these schemes only give money for initial project/machines. Dont provide support for working capital (i.e. cost of day to day operations, buying raw material, electricity-utility bills etc.) Solution: Integrate all schemes offered by various Ministries and allied agencies. After years of stupidity and badass thuggary, finally they woke up during 12th Five year plan drafting. Now theyre converging various schemes of Horticulture board, Agriculture ministry, Food processing ministry and
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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
Commerce ministry under the National Mission on food processing. ok, better late than never but even small time players like Thailand and Vietnam have reformed before we did. So theyre already ahead in the race of capturing export market. Anyways, lets check various plans, missions, schemes.
overall
Schemes
Finance
Fancy Things
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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
Export
Functions of MoFPI
1. Launch National Mission on Food Processing 2. R&D in food processing, Specialized packaging for food processing industries, Technical assistance and advice to food processing industry 3. Enhance Processing level and reduction in wastages 4. Food Safety & Quality assurance 5. Financial assistance, grant-in-aids, tariff issues related to Fruits and vegetable, Food grain milling industry, Dairy products, poultry, eggs, meat, Fish processing Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery, other ready to eat food products Alcoholic drinks, beer, Aerated waters / soft drinks and other processed foods 6. strengthen institutions such as National Institute for Food Technology and Entrepreneurship Management (NIFTEM) Indian Institute of Crop Processing Technology (IICPT) Indian Grape Processing Board (IGPB) National Meat & Poultry Processing Board (NMPPB) MoFPI is responsible to 2 fancy missions +3 (bogus) schemes & given ~700 crores in 2013s budget. 2 fancy missions 1. Vision 2015 for food processing 2. National Mision on food processing 3 schemes 1. mega food parks 2. modernization of abattoirs (slaughterhouses) 3. cold chain infrastructure + some chillar schemes for HRD, R&D. Lets see their salient features:
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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
by Ministry of Food processing adopted In 2005 What? processing perishable food produce value addition to food produce Indias share in global food trade investment targets by 2015 20% 35 3% 100 thousand crore
This vision2015 document was prepared by Rabo India Finance ltd. It talks about individual sectors (dairy, meat, tea, coffee etc.) Well see those points later during articles on individual sector.
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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
4. 5. 6. 7. 8.
Modernization of Abattoirs Modernization of Meat Shops Human Resource Development (HRD) Promotional Activities Up-gradation of Quality of Street Food
composition
^this is ~200 words. From UPSC point of view, the Aukaat of NMFP is not beyond 15 marks questions on salient features. Hence not covering any further. Moving to the three schemes
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Non-Core Facilities
Common Facilities
Basic Infrastructure
Services
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Imagine a bicycle wheel: it has a strong central hub with a series of connecting spokes. Thus we have One Central Processing Centre (CPC) as the hub Multiple Primary Processing Centres (PPC) that supply raw material to the hub Three Tiers: SHG What? A self-help Group of 10-20 farmers. They aggregate fruits/veggies produced by member-farmers @village level. Society or association of 10-20 self-help groups (SHG) They provide basic minimum facilities for post-harvest management= washing, fumigation. Supply of inputs: seeds, fertilizers etc and information via internet kiosks.
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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
made up of 10-20 field collection centers. These PPCs do the primary processing viz. sorting, grading, packing of raw material and ensure regular supply of raw materials to the food industries in the central processing center (CPC) of the Mega Food park.
^ Similar concept for eggs and milk. click the following diagram and concept will become clear:
Mega Food Park (Click to Enlarge) Here, each tier is viable, independent and linked with higher players in the market. This way thousands of farmers directly connected to food industries located in the Mega food park, without any commission agents= Small, marginal, poor farmers will get more money.
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1. 2. 3. 4.
1. 2. 3. 4. 5.
Location Advantages
1. Chittoor already an Agro-export processing zone, leading producer of mangoes. 2. only 120 kms from Tirupati, a pilgrim center with more than 150,000 floating population per day=plenty of demand for processed food. 3. on the National Highway connecting Bangalore and Chennai 4. equi-distant from two major metros in India, a major port (Chennai) and two international airports (Chennai and Bengaluru) and one domestic airport (Tirupati) Countrys first Mega food park launched in 2012
1. This region is second most productive zone in Bihar in terms of total production of fruit and vegetables 2. The cluster is very close to Begusarai (about 100 kms) that is a transport hub and provides good support for transportation of products. NH-31 (Barhi to Guwahati) and NH-28 (Lucknow to Barauni) meet at Zero Mile near Barauni in Begusarai district. 3. It is also the gateway to Northeast for goods transportation, being a zone heavy surface traffic movement.
Sidenotes
#Epicfail. Few days back, main promoter company (Kevantar Ltd) left the project because of land acquisition problem.
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Area General North East, Hill area, areas under integrated Tribal development plan Maximum grant: Rs.10 crore per project.
Well see more details on cold storage with respect to fruit-veggies processing in separate article later.
Financial assistance area General North East, Hill area, areas under integrated Tribal development plan Maximum grant: Rs.15 crore per project. Ten slaughterhouse projects ongoing: 1. 2. 3. 4. 5. Dimapur (Nagaland) Kolkata (West Bengal) Ranchi (Jharkhand) Shimla (Himachal Pradesh) Hyderabad (Andhra Pradesh) 6. 7. 8. 9. 10. Patna (Bihar) Ahmednagar (Maharashtra) Jammu (Jammu & Kashmir) Srinagar (Jammu & Kashmir) Shillong ( Meghalaya)
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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
So, these three were the main schemes of Food processing ministry. 1. mega food park 2. cold chain infra 3. slaughterhouse modernization. Now lets look @some chillar schemes of this MoFPI (Ministry of food processing industries)
North East
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Mrunal [Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes Print
departments/ministries. (Here, Im only focusing on schemes related to postharvest management, storage, food processing and Agro-export, otherwise there are dozens of schemes related to agriculture, public procurements etc. but theyre ignored here.) First the food grains
PEG scheme
By Whom? = Department of Food & Public Distribution (DFPD) In recent times, Government has increased the Minimum Support Price (MSP) for wheat and rice. Result? high procurement but FCIs storage capacity =limited=rotten grains. In 2008, new scheme was made Private Entrepreneurs Godowns (PEG2008). To increase grain storage capacity with help of Private sector. Government gives grants to private players, for constructing godowns gives a business guarantee of ten years for assured hiring. meaning FCI will hire that private godown to store publicprocured food grain and pay for service
FCI
FCI reforms
Initiates to prevent rotten grain in godowns, FCI will be doing following:
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1. Dunnage materials: wooden crates, bamboo mats, polythene sheets to prevent moisture from floor to the foodgrains. 2. fumigation, insecticides to control pests and rats. 3. Regular periodic inspections of the stocks/godowns by senior officers. 4. The principle of First in First Out (FIFO) to avoid longer storage of foodgrains in godowns. 5. To avoid damage during transit: a. Only covered rail wagons will be used to transporting grain b. use of tarpaulins (waterproof canvas) on trucks during road movement.
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Commercial Horti
Tech Dvlp
nation-wide communication network for speedy collection and dissemination of market information including: 1. wholesale prices, arrivals and trends in various markets of the country for important fruits, vegetables & flowers etc. 2. retail prices in selected markets/cities 3. international prices for potential export items 4. horticulture database, production trends then NHB issues farmers advisory using above reports. 1. Specialized studies and surveys for targeted beneficiaries. 2. Technical laboratories and consultancy services. 3. Review the present situation of horticulture development
market information
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in particular area/ State Identify constraints in horticulture development and suggest remedial measures Develop short term and long term strategies for systematic development of horticulture, Develop primary/secondary data of various aspects on horticulture Provide consultancy services, expert services & establishing labs etc Conduct technical scrutiny and certification of cold chain infrastructure Preparing reports relating to export competitiveness in the area of fresh horticulture produce
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5. Introduce Negotiable warehousing receipt system 6. promote forward and future markets 7. To create general awareness and provide education and training to farmers, entrepreneurs and market functionaries.
Agmarknet
Agricultural marketing information network (http://agmarknet.nic.in/) by Directorate of Marketing & Inspection (DMI) under Agro ministry. it is an online portal that provides information on following Prices Movement daily prices of various commodities information on the type of goods that have arrived across the various wholesale markets Commodity A comprehensive database 300 commodities and 2,000 varieties Appropriate farming practices which can be adopted by the farmer All India weather conditions and weather forecasts and their impact on the agri-production levels information on various commodity exchanges in India and abroad along with higher institutes for agricultural research, international agencies like the Food and Agriculture Organization
Farmers Advisory
ok so far we saw the schemes associated with Agro+Horti+Marketing. Now moving to Dairy
Dairy Schemes
By Department of Animal Husbandry, Dairying & Fisheries They run following schemes: 1. install Bulk Milk Coolers at village level close to the area of milk production 2. for installation of bulk milk cooler 100 per cent grants in aid for Dairy processing and marketing milk equipment for bulk milk coolers, chilling centers, refrigerated tankers and
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cold storage to encourage entrepreneurs in setting up modern dairy infrastructure for clean milk production helps in bulk milk coolers, transportation facilities including refrigerated vans, cold storage facility
ultimately to
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^Exactly 159 words. Again aukaat of National dairy plan cannot be beyond 1215 marks from UPSC point of view, hence not going into further details. Besides, well look more into Dairy sector in separate article later. Time to move on to Agro-Export related schemes
AEZ: Problems
1. Government Agencies dont take ownership or responsibility. 2. Villagers and field officers are unaware about the scheme and its conceptual framework 3. The Design of AEZ itself doesnt have project orientation. 4. Lack of coordination/ monitoring system in AEZs 5. The investment made by central and state government have not materialized into real-useful assets on the ground. 6. Indiscreet proliferation of AEZs in certain states. WB, Maharashtra have multiple Agro export zones while Odisha barely got one AEZ and that too
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in 2013= More than a decade after the scheme was launched in 2001!
Export to Europe, Latin America block, African block, or Commonwealth Independent States (CIS) block are entitled for duty credit.
duty credit for exports to countries NOT included in above FMS list e.g. Thailand, Taiwan and the Czech Republic. (ok then when next: another scheme for countries not included in MLFPS list?) duty credit for exporting following
1. 2. 3. 4. 5.
Agricultural Produce and their value added products; Minor Forest Produce and their value added variants; Gram Udyog Products; Forest Based Products; and Other Products, as notified from time to time.
Doubt: what is duty credit? Without going into all technical correctness: You exported xyz worth Rs.100 then Director General of Foreign trade will give you a scrip (piece of paper) worth Rs. 2 to 5 (or whatever % credit is decided in the scheme) When you import capital goods, youve to pay custom duty. But you can use these credit scrip to pay for that custom duty. Another doubt: Why does or why should government give duty credit? Ans. Because other (stupid) schemes have failed to improve the rural infrastructure, hence it is difficult to transport/market these products from India to abroad. Therefore duty credit is given to offset infrastructure inefficiencies and other associated costs involved in marketing of these products.
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Misc. Bodies
List is not exhaustive (and that is the criticism: too many bodies=lack of coordination.)
Export related
Agricultural and Processed Food Products Export Development Authority (APEDA) Statutory body under commerce ministry provides financial assistance to food exporters. bears the cost for doing analysis of peanuts, grapes for meeting HACCP/Codex standards. Gives money to State Government, Public Sector Undertakings for conducting surveys, feasibility studies etc. Marine Products Export Development Authority (MPEDA) Ministry of Commerce, Government of India acts as a coordinating agency with different Central and State Government For Fishery production and allied activities. Export Inspection Council of India (EIC) statutory body under Commerce Ministry For inspection- certification for marine, milk, meat, poultry, marine and egg products, and honey for export units. EIC approved units have to implement following international standards of CODEX laid down by FAO and WHO, Good Management Practices (GMP) Good Hygiene Practices (GHP)
APEDA
MFEDA
EIC
Boards
Coffee Board Spices Board Tea Board bodies under commerce ministry offers various schemes, services to growers and exporters R&D, HRD maintains database, runs newsletters Promotes Indian products international food fairs
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Grapes
Under Ministry of Food processing Industries (if tea, coffee and spices boards were setup under Commerce ministry then why did they setup grapes board under Food processing ministry? Ans. so they can confuse aspirants to ask a stupid MCQ in some exam.) Promote cooperative efforts, backward and forward linkages between growers and wine industry in general. set up facilities for wine analysis, testing, standards, certification of wine and promoting Good Manufacturing Practices (GMP)/ Hazard Analysis and Critical Control Points (HACCP) National Dairy Development Board Statutory body To promote, finance and support dairy cooperatives. National Meat and Poultry Processing Board (NMPPB) Under Ministry of Food Processing Industries a single window service provider for producers/manufacturers and exporters of meat and meat products, For analyzing various microbiological and physicochemical parameters related to various food and food products. Training meat workers
Nddb
Meat + Poultry
Research/Education related
Indian Council of Agricultural Research (ICAR) is an autonomous organisation under the Department of Agricultural Research and Education (DARE), Ministry of Agriculture, Government of India. ICAR is the apex body for co-ordination, research n development (R&D) and education in agriculture including horticulture, fisheries and animal sciences in the entire country. HQ=Delhi Central Food Technological Research Institute(CFTRI), Mysore (part of CSIR) R&D in food science, food safety, low-cost food processing etc.
ICAR
CFTRI
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Crop processing
Indian Institute of Crop Processing Technology (IICPT) under the Ministry of Food Processing Industries, Teaching, research, labs and extension services in food processing National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) Deemed to be University Under Ministry of Food Processing Industries high quality educational and research programme support the regulatory authority through referral advice on food standards. Developing world class managerial talent with advanced know how in food science and technology.
NIFTEM
Nutrition
National Institute of Nutrition under Ministry of Health and Family Welfare for R&D on food-nutrition-toxicology studies. Indian Institute of Horticulture Research, Banglore developing new hybrids, pest-disease-nutrient management etc. for fruits, vegetables, ornamentals, medicinal and aromatic plants and mushrooms
Horticulture research
Next article, we see the nuisance of middlemen, APMC Acts, direct cooperative markets (Rythu bazar etc).
URL to article: http://mrunal.org/2013/08/food-processing-mega-food-parksagri-export-zonesaez-cold-chains-and-truckload-of-government-schemes.html Posted By Mrunal On 21/08/2013 @ 22:10 In the category Economy
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